Can the US Learn from Europe When It Comes to Energy Storage?

As the penetration of renewable power generation increases, new grid services are required to ensure the overall operation of the grid is as efficient as possible. Global interest in long duration energy storage is rising as the growth of solar and wind generation makes issues with grid stability and efficiency more tangible for grid operators.

Long duration energy storage provides services on the electric grid that will be essential to integrating high penetrations of renewable energy. The specifics of each service will vary by market and primarily fall into three buckets: the shifting of energy supply to align with demand, optimizing existing transmission and distribution infrastructure, and providing dispatchable capacity and energy reserves.

Success in Europe

Europe has 39 GW of long duration energy storage in operation, nearly all from pumped hydro storage. By comparison, the US has 24 GW installed. 8 GW is in the Western US, where renewable energy is beginning to have a major effect.

This resource has played a key role in Europe’s ability to deploy large amounts of new solar and wind generation. One of the most experienced long duration energy storage operators in the region is the Swiss utility Alpiq. Alpiq has seen several drivers for the use of long duration storage, most notably the significant need for a large capacity of fast and flexible resources that can be brought online to meet the evening ramp up in demand when solar generation ends. Alpiq also sees a greater need for bulk energy storage capacity that can absorb and store many hours of excess renewable generation.

Alpiq decided to build a new large-scale pumped hydro storage plant capable of absorbing excess generation and providing reliable capacity to meet the evening ramp period. The new plant, Nant de Drance, will commission in 2019 and is centrally located to serve four countries and optimize the use of renewable generation in the region as fossil fuel power plants are retired.

Renewables Integration Challenges in the US

States in the Western US have set ambitious goals to reduce emissions from power generation and are already seeing the impacts of a shift to reliance on solar and wind.

A transition to renewable generation is underway in the Pacific Northwest, and it is gaining momentum to meet emissions reduction goals. Load growth and the replacement of retired fossil fuel power plants with renewables could result in an 8 GW capacity deficit in the region by 2030 unless new dispatchable capacity resources are developed.

California is seeking to achieve 100% carbon free electricity generation by 2045. As its renewable energy capacity increases, fossil fuel power plants are being retired, resulting in the loss of dispatchable capacity. According to the California Independent System Operator, up to 9.6 GW of natural gas-fired generation may be retired for economic reasons. If even 4 GW (or less) natural gas comes offline, the state could see load following shortfalls.

Seeking Solutions

California faces a situation similar to Europe given its reliance on importing energy from interconnections with the Pacific Northwest and a growing percentage of renewable generation on its system. Given the scale of looming capacity shortages in the Western US, energy storage will play a vital role in the future decarbonized energy system, with different technologies playing the role they are best suited for. Certain battery storage technologies are ideal for grid stability services and short-term energy shifting. However, large-scale and long duration resources are uniquely suited to stand in as a direct replacement for the bulk capacity reserves and other grid services provided by retiring fossil fuel generators.

Guidehouse Insights explored the dynamics of the long duration energy storage market in a recent report, and in a new webinar and white paper that explore how Alpiq has effectively used pumped hydro storage in Europe and how that success can be replicated in the US.